Despite nearly three million consumers using open banking services and the recent news that HMRC has now adopted Open Banking payments, many businesses are holding back from implementing the technology due to concerns around the cost of storing and protecting customer data, seemingly unaware of the option to partner with established service providers that can deliver these services and lessen the associated data risks according to new research by In Yolt Technology Services (YTS).
The company’s most recent survey of senior professionals working in the sectors best positioned to benefit from the efficiency and cost savings, improved customer experience and security benefits of open banking (banks, lenders, personal finance management and retail), 48% believed the main risk involved with open banking technology centred on the cost and liability associated with processing consumer data.
Businesses are prohibitively concerned by perceptions they will have to take responsibility for large levels of personal and financial data, believing it is costly to both store and protect. This was particularly strong in the retail sector, with nearly two thirds (61%) feeling this way.
The company say that the security architecture of the Application Programming Interfaces (APIs) used by TSPs and which carry open banking data is incredibly safe and meets the highest standards of data protection rules. In the case of YTS, which has FCA authorisation to deliver open banking services in the UK, businesses have the option to use the technology under the license of the service provider, greatly reducing the risk to businesses that wish to embrace this technology.
Roderick Simons, Chief Technology Officer at Yolt Technology Services said “Technical service providers like YTS make open banking not only accessible to every business, but also more cost-effective and with less risk than building a solution from scratch. It seems that many companies are unaware this choice exists and are therefore missing out on growth opportunities because of their misconceptions and misunderstandings about their role in keeping customer data safe.”
“The reality is that TSPs shoulder all of this risk, with little downside for the adopting business. It’s clear there’s a knowledge gap which needs to be filled, and it’s not the fault of businesses that they have these beliefs – it’s up to our industry to change them.”
“A core objective of our research was to understand how we can do this and how we can help businesses to adopt the technology and reap its rewards. Education and collaboration are at the heart of our approach, and we’re committed to spreading knowledge and educating businesses about how they can transform the way they operate with open banking.”